As a result of the restructuring, which will involve staff reductions of over 70% of the company’s total workforce, Avigen expects to have sufficient cash to fund operations for over four years.
Avigen’s contract with Sanochemia Pharmaceutica regarding AV650 has been terminated to avoid further payment obligations on the part of Avigen. The company believes the breadth and value of AV411 can be best realized with the support of a partner; therefore, Avigen intends to seek a partner and does not currently plan to initiate the Phase IIb development program for neuropathic pain. Current and future National Institute on Drug Abuse-funded Phase IIa trials in opioid withdrawal and methamphetamine relapse will continue.
Proceeds from the sale or partnering of Avigen’s current assets (AV411 and AV513) could significantly increase its cash position and its ability to develop additional assets to meaningful value inflection points without additional equity financings, said Avigen.
Kenneth Chahine, Avigen’s president and CEO, said: “By reducing to only a core team, we can significantly lower our infrastructure costs, while retaining the know-how and expertise necessary to monetize our current assets and identify opportunities to acquire new assets. We believe our strong cash position and management team will make Avigen an attractive partner in this challenging financial climate.”